Reply #11: no other organization on earth could efficiently handle a donation that [View All]

[fishwax]

large. Smaller organizations would spend too much money building the administration and infrastructure that it would take to handle that amount of wealth, and then less of the money would actually get to the people who need it most. The Gates Foundation is the largest philanthropic organization in the world, and they already have the resources to put that kind of money to use efficiently.

Another reason it went to GF: The donation is in stock, specifically Buffett's shares of Berkshire-Hathaway. The value of future distributions of this stock, both to the GF and to the other four organizations he's donating to, thus depends upon the price of the stock. A smaller organization would likely have to sell the stock in order to generate cash. The scope of those sales could well lower the stock price, thus reducing the value of future distributions. But the GF has enough resources that they can hold on to the stock and liquidate it more slowly, thus keeping the value high and using the wealth more efficiently.

Originally, Buffett's plan was to donate the bulk of his estate to his wife's foundation upon his death. But the Suzie Buffett foundation would then have to spend a significant amount of that estate to ratchet up their own organization. When he figured out that the GF could put his wealth to efficient use now, he decided he would not wait until his death to distribute his estate. In addition, he takes an organizational role in the GF as co-director, so he will have some input into the foundations programs.

I applaud Buffett for his donation of billions, which will go towards international health, fighting international and domestic poverty, supporting pro-choice causes, and other important issues.